Consultants are having a hand in pushing the conversation about the need for diversity forward.
Callan LLC has had its program to engage emerging managers and those firms owned by women, disabled, minority and other underrepresented individuals in place for 10 years, said Lauren Mathias, San Francisco-based senior vice president and non-U.S. equity investment consultant in Callan's global manager research group. Ms. Mathias runs the program called Callan Connects.
Callan has also an inclusion committee that includes senior members of the firm's consulting staff and human resources, which monitors the progress of its diversity and inclusion initiatives as well as in the money management industry, Ms. Mathias said.
"To show the industry that we are serious about diversity and inclusion we are continuing to upgrade our (due diligence) questionnaire for the investment management community," Ms. Mathias said.
"The reason we are doing that is our clients are interested in this. They want to know about their asset managers and they want to see the progress," she said.
Callan's team of private equity consultants are also encouraging managers to fill out the Institutional Limited Partners Association's diversity and inclusion template and to use ILPA's diversity and inclusion road map, Ms. Mathias said.
Among alternative investment managers, private equity managers have been more aggressive in promoting diversity than hedge funds where it is not as much of a focus, she said.
But the movement of general partners to diversify their teams is "really at the request of the asset owners," Ms. Mathias said.
Change has been at a glacial pace, said Robert Raben, Washington-based executive director of the Diverse Asset Managers Initiative, an effort to increase allocations to firms owned by diverse individuals and women.
"There has been movement and it is cognizable," Mr. Raben said. "It's good … and woefully insufficient compared to other industries."
Mr. Raben said much of the change has been among consulting firms as they are playing a crucial role.
"The change that I am seeing is some tactical efforts by critical mass of consulting firms," Mr. Raben said.
Consulting firms are hiring people of color and adopting the "Rooney Rule" — a National Football League policy requiring teams to interview minority candidates for top jobs. Consultants are also now separating emerging manager programs and programs to invest with minority- and women-owned management firms, he said.
"For years, the two had been conflated," Mr. Raben said.
Consulting firms are also working to increase the diversity of their staffs.
Nine consulting firms that responded to the Diverse Asset Managers Initiative's annual consultant survey offer a diverse manager program and all of them regularly recommend diverse managers even when there is not a diversity manadate, according to the 2019 survey of the Washington-based organization, which aims to increase the number and assets under management of diverse-owned firms.
At San Francisco-based Callan, 52% of its management committee is female and/or diverse and 58% of managers are female and/or diverse. Some 57% of all Callan employees are either female or otherwise diverse.